BP Reaches Out to Supreme Court in Oil Spill Appeal

By William Peacock, Esq. on May 30, 2014 12:01 PM

British Petroleum made a bad bargain, a settlement that contained a formula that made it possible for parties not affected by the massive Deepwater Horizon oil spill disaster to gain windfall payouts. Though that formula was tweaked last year, and again this year, BP still wants to freeze the payouts.

Too bad, said the Fifth Circuit, both in a panel opinion and an en banc denial. Now, the oil company is reaching out to the Supreme Court in hopes that the nine justices will save the company from its own bad bargain, one that some argue has already been "fixed."

En Ban Denial and a Cert. Petition

Last week, we covered the en banc denial, one that five judges dissented from. At the time, we noted that BP was out of options, unless the Supreme Court decided to intervene.

That's exactly the play BP is making, with an application for a stay [PDF], pending a certiorari petition, filed with the Supreme Court earlier this week. The company is also waging a PR war via advertisements in The New York Times, assuring the public that "this legal fight has not in any way changed our commitment to the Gulf."

Here is what BP isn't so eager to publicize: New rules promulgated by settlement administrator Juneau and approved by Judge Barbier will effectively block the very claims BP was so worried about when it launched its campaign against its own settlement a year ago.

In fact, it's the plaintiffs, the ones that were supposedly taking advantage of the corporation's generous settlement terms, that are fighting the adjusted terms. According to Frankel, they've filed a motion to amend the new policy, which applies retroactively to all claims not yet paid out (reportedly saving BP several billion dollars), as they argue that it conflicts with last year's order from the Fifth Circuit.

The plaintiffs are effectively arguing that the newest order rewrites the terms of the settlement. Meanwhile, BP is asking the Supreme Court to allow them to rewrite the terms of the deal as well, either to further reduce their exposure or maybe, as a just-in-case measure should the plaintiffs arguments succeed.

Frankel's enlightening piece has a lot more on the specifics of the new formula, and the two parties' tactics.

Meanwhile, unlike last week, when BP was running out of options, and the case appeared to be close to completion, this week it's looking like both parties are going to be attacking the settlement for years to come.

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U.S. Fifth Circuit features news and information from the U.S. Court of Appeals for the Fifth Circuit, which hears appeals from U.S. District Courts in Louisiana, Mississippi and Texas. This blog also features news that would be of interest to legal professionals practicing in the 5th Circuit.
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